5 Benefits The Reverse Mortgages Offer For Seniors

First, the reverse mortgages for seniors are great products, when you have cleared, whether they will fit to you and to your circumstances. The key fact, when you start to ponder, is the need for which you have planned to take the reverse home mortgages.

1. The Usual Case To Take The Reverse Mortgages For Seniors Is The Need Of An Extra Monthly Cash.

This is also the main benefit, which you can get from the reverse home mortgage. You will get cash but you do not have to pay it back on a monthly basis. The system works in the way, that you use the equity of your home and convert the part of it into cash money.

The payments are tax free to you and you can deduct the interests, when you have paid them, after you have moved away from your home.

2. The Reverse Mortgages For Seniors Offer A Chance To Cash Out A Part Of The Home Equity.

The basic criteria for a qualification is, that you are American and age at least 62 and own your home, where you live permanently. Now you are eligible to apply for the reverse mortgages for seniors.

The needs for extra cash are many. You may want to buy a home for your child, or to use the money for increased medical bills, or you may want to travel etc. The reverse mortgages work in that way, that nobody will ask you, for which purpose you will use the money.

3. You Can Decide How The Lender Will Pay You.

Your need dictates, how the payments will happen. The alternatives are as a lump sum, as monthly payments, as a credit line or as a combination of some of these. What is the best reverse mortgage program is your own decision.

4. All Reverse Mortgages For Seniors Will Be Paid Back, When Your Home Is Sold.

This means, that the reverse mortgages do not have any monthly payments to the lender. All costs, interests and the capital will be paid back when your home is sold. The difference of the selling price and the costs belongs to you.

5. You Will Never Pay Back More Than The Value Of Your Home. When you think the reverse mortgages for seniors, note that there is an obligatory mortgage insurance.It means that if the selling price of your home is lower, than the amount of costs, the difference is paid from the insurance.

Your other assets will never be used to pay your reverse mortgage loan. You will borrow the more, the older you are, the lower is the interest rate and the more valuable is your home. Actually you can decide, whether you take the reverse loan with variable interest or with the fixed one.

The Reverse Mortgage Association: Answers For Seniors

The National Reverse Mortgage Lenders Association was established in 1997 to provide a variety for services for both those wishing to take advantage of reverse mortgages on their homes and lenders wishing to finance reverse mortgages.
The Reverse Mortgage Association has an educational program to aid senior citizens who have decided to take out a reverse mortgage as a way to remain financially independent The Reverse Mortgage Association has also established a Code of Conduct to which it expects reverse mortgage lenders to adhere in their dealings with senior citizens; it also has a training program in which reverse mortgage lenders are encouraged to participate.
How Reverse Mortgages Work
The Reverse Mortgage Association oversees a program in which homeowners sixty-two and older can turn a percentage of their home equity into non-taxable income while still retaining title to their homes. They are freed of the burden of a monthly mortgage payment, which they would otherwise have to accept by taking out a traditional home equity loan. The Reverse Mortgage Association oversees the activities of lenders who make the reverse mortgage payments to the senior homeowners.
A reverse mortgage does not have to be paid back until the home is no longer the borrowers’ principal residence, the borrowers pass way, the home is sold, or the borrowers leave it for good. And it the home is sold for an amount greater than the outstanding balance on the reverse mortgage, the borrowers, or their estates, can keep the difference. For more info see http://www.i-reversemortgages.com/Reverse_Mortgage_Information/ on Reverse Mortgage Information.
The Future Of Reverse Mortgages
With the Baby Boomer generation now entering their 60′s, the number of reverse mortgage loans is expected to increase dramatically. Because of that, it is more important than ever those senior citizens can trust the integrity of their lenders. The Reverse Mortgage Association has the job of verifying the quality and professionalism of reverse mortgage lenders and assuring that they will be an asset to the communities in which they do business.
The Reverse Mortgage Association holds a series of annual conferences for its member lenders, so that they can remain educated in the latest reverse mortgage issues, products, and borrower concerns.
For seniors who have been caught in the trap of dwindling IRA values, disappearing pensions, and rising health insurance costs, the idea of trying to survive in retirement on Social Security and little else may be devastating. A reverse home mortgage, from a lender who honors the Code of Conduct established by the Reverse Home Mortgage Association, could give them the secure retirement for which they are longing.

The Reverse Mortgage is Meeting the Needs of Seniors in a Big Way

In most cases the senior is looking places to find money to off set the major loses they have felt from the banking and investment crisis. The one place that is still a safe haven in many areas is the home, even with declining values. The main reason is that most seniors purchased their homes when values were mush lower before the great appreciation era. If a seniors still has a mortgage on their home and many do have a current mortgage on their home and have to make payments every month. If a senior has a first mortgage lets say just for $100,000 at a 6% rate they are putting out over $600.00 per month or $7,200 per year. This amount if they did not have to make the payment would be added to their income that they would be able to use to live.

In many cases seniors over the years when the economy was booming many took at 30 year loans and or adjustable rate mortgage and are now faced with higher payments and they are trying to stay afloat.

If a senior is faced with this problem they should really consider a Reverse Mortgage for many reasons not to mention relief from payments. In many cases not only would they be free from mortgage payments, but they would receive additional funds to use as they see fit. Under the Reverse Mortgage program they senior controls how and what they spend the money on once they have closed.

Some things never change when doing a Reverse Mortgage and that is they still must pay the taxes and insurance on their home. If a senior is use to having an escrow of taxes and insurance they maybe able to set aside the monies with the company and have them pay it yearly for them.

One thing that all seniors should be looking at is the availability to access the money that they need from their home that they paid for over the course of their lives. In the years that you will need it the most and not have to worry about paying it back in their lifetime.

Many seniors are now thinking that if they take out a Reverse Mortgage and the bank or Mortgage Company goes out of business they will be out of luck. This is not true it is protected by the FHA mortgage insurance, that if they do go out of business then Federal Government takes over and pays them the money. The Reverse Mortgage is the safest mortgage in the entire mortgage industry. Unlike a typical mortgage where a lender has many options to force your paying of the loan, the Reverse Mortgage has the full protection of the US Government that guarantees that the senior will never have to leave their home for as long as they live. This of course is providing they pay their taxes and Insurance and continue to live in the home as their primary residence.

Now in 2009 a new program is emerging within the Reverse Mortgage and this a great option for many seniors who have one reason or another sold their home or have to move to a newer location. The Reverse Mortgage purchase program is now available to seniors over the age of 62. The program is design to allow seniors to purchase a home without any mortgage payments for life. Now just to make it very clear this does not mean that a senior can purchase with no money down. This is not the same mortgage that got this country in to the financial situation that we are in where people would by a home with zero down or less in some cases.

A senior who is looking to purchase a home will have to have money to purchase a home; it is all based on the age of the person and the appraised value of the home. Let’s say that a person age 62 wants to purchase a home that is appraised at $200,000, they would need approximately 40% down payment on the home. They would in most cases be able to finance all or part of the closing cost within the Reverse Mortgage. But let’s look at it in another way! Remember the older you are the less you will need down!

If that same person wanted to purchase a home using a conventional mortgage, they would need at least 20% down and would have to qualify with at least a 720 credit score and have the income to qualify for the mortgage payment.

So let’s look at the difference!

Conventional Reverse Mortgage

Now this is what it looks like on paper for a conventional mortgage verses the Reverse Mortgage the big difference is that a senior for a Reverse Mortgage purchase they will not have to qualify for the loan they already are if they are 62 or older. Also under the conventional mortgage if a senior fails to make a payment on their mortgage they will be foreclosed on just like anyone else.

For the senior who has a mortgage currently and is worried if they are going to be able to make payments on the mortgage Think Reverse Mortgage! No Income or Credit qualifying; if think this isn’t a big deal call your mortgage banker and see what it takes to get a mortgage today.

Also this is very important issue your conventional mortgage is not guaranteed that you will stay in your home for the rest of your life!

Here is what you have to do to get a Reverse Mortgage for your home!

So if you are thinking of how you are going to make it through these hard times, waiting to see if the market will ever turn around you are loosing money in your home.

Remember this as the stock market, and real estate even stay where it is now you may never see the return of that money.